U.S. Inflation Rises 8.3% Over Last Year in August; Core Rate Firms

The yearly rate of inflation in the United States slowed some but remained hot with higher costs in August for items like groceries, shelter, clothing and medial care offsetting a double-digit drop in gasoline prices, according to U.S. government data released Tuesday, Sept. 13.

Although the annual rate of energy gains slowed sharply from the peak in June (23.8% now vs. 41.6% then), the pace of food price increases was the still quickest in over four decades.

In the headline monthly figure, U.S. consumer prices rose 0.1% in August after being unchanged in July, the Labor Department said in its monthly report on the Consumer Price Index (CPI). The CPI is a broad measure of what Americans pay for everyday items ranging from eggs to electricity.

Overall food prices increased 0.8% for the month, following seven straight monthly advances of 0.9% or more, with groceries 0.7% higher and costs at restaurants and the like up 0.9%.

Food inflation soared 11.4% year-over-year, for the fastest rate since April 1979. Prices for groceries advanced 13.5%, the most since March 1979, and they increased 8% for foods consumed outside of the home.

Prices at the pump tumbled 10.6% in August after falling 7.7% in July, trimming their year-on-year increase to 25.6%. Gasoline inflation in the annual period ending June at 59.9% was the highest since March 1980.

The broader index for energy, which combines items like gasoline, electricity, and fuel oil, fell 5% for the month after sliding 4.6% in July. Energy costs increased 23.8% from a year ago.

Excluding the more volatile food and energy components, the rate of core consumer prices in August quickened to 0.6% from 0.3%.

"The renewed jump in core prices for August undercuts the weaker headline inflation rate spurred by lower gasoline costs,” Reuters quoted Ben Ayers, a senior economist at Nationwide in Columbus, Ohio.

Shelter or housing prices increased 0.7% in August after rising 0.5% in July. They jumped 6.2% from a year earlier for their biggest 12-month increase since hitting the same mark in August 1990.

"While there are some encouraging aspects to this report, the underlying dynamic is that core continues to rise and pressures have spread out further into housing, which requires the Federal Reserve to continue to lift the policy rate higher, likely north of 4%," The Wall Street Journal quoted Joseph Brusuelas, chief economist at RSM U.S. LLP.

Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. This index accounts for about one-third of the entire CPI.

Airline fares fell 8.8% last month after declines of 7.8% in July and 1.8% in June. Earlier, they posted increases of 12.6% in May and 18.6% in April, which was the largest 1-month gain since the inception of the series in 1963. They are 33.4% higher year-over-year.

Clothing prices rose 0.2% after inching 0.1% lower, and they again increased 5.1% from a year earlier.

New vehicle prices picked up 0.8%, for their sixteenth increase in seventeen months, after rising 0.6% previously. They increased 10.1% from a year ago.

Used car and truck prices dipped 0.1% after edging down 0.4% and are 7.8% higher than a year ago.

In the headline annual figure, inflation rose 8.3% over the past 12 months after climbing 8.5% previously. The high-water mark for this year happened in the 12-months ending July at 9.1%, which was quickest rate of inflation since November 1981. Annual inflation rates have now topped 6% for eleven straight months and have been at or above 7% for nine months in a row.

Meanwhile, core inflation advanced 6.3% over the past year compared to 5.9% previously. Of note, in the annual period ending March, the core rate at 6.5% was the highest since August 1982. The core, "all items less food and energy" index is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it guides the central bank when setting its key interest rate.

"Underlying inflation pressures remained intense in the August CPI report, virtually guaranteeing another outsized rate hike from the Fed next week," MarketWatch quoted senior economist Sal Guatieri of BMO Capital Markets.

The following table of key inflation figures is for the last seven months through June, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on Sept. 13, 2022. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.

February 2022 to August 2022 Consumer Prices – Gains & Losses in Percent
(Seasonally Adjusted)

  Feb. 2022 March 2022 April 2022 May 2022 June 2022 July 2022 Aug 2022 12 Month
All items 0.8 1.2 0.3 1.0 1.3 .0 0.1 8.3
  Food 1.0 1.0 0.9 1.2 1.0 1.1 0.8 11.4
    Food at home 1.4 1.5 1.0 1.4 1.0 1.3 0.7 13.5
    Food away from home 0.4 0.3 0.6 0.7 0.9 0.7 0.9 8.0
  Energy 3.5 11.0 -2.7 3.9 7.5 -4.6 -5.0 23.8
    Energy commodities 6.7 18.1 -5.4 4.5 10.4 -7.6 -10.1 27.1
      Gasoline (all types) 6.6 18.3 -6.1 4.1 11.2 -7.7 -10.6 25.6
      Fuel oil 7.7 22.3 2.7 16.9 -1.2 -11.0 -5.9 68.8
    Energy services -0.4 1.8 1.3 3.0 3.5 0.1 2.1 19.8
      Electricity -1.1 2.2 0.7 1.3 1.7 1.6 1.5 15.8
      Utility (piped) gas service 1.5 0.6 3.1 8.0 8.2 -3.6 3.5 33.0
  All items less food, energy 0.5 0.3 0.6 0.6 0.7 0.3 0.6 6.3
    Commodities less food, energy 0.4 -0.4 0.2 0.7 0.8 0.2 0.5 7.1
      New vehicles 0.3 0.2 1.1 1.0 0.7 0.6 0.8 10.1
      Used cars and trucks -0.2 -3.8 -0.4 1.8 1.6 -0.4 -0.1 7.8
      Apparel 0.7 0.6 -0.8 0.7 0.8 -0.1 0.2 5.1
      Medical care 0.3 0.2 0.1 0.3 0.4 0.6 0.2 4.1
    Services less energy 0.5 0.6 0.7 0.6 0.7 0.4 0.6 6.1
      Shelter 0.5 0.5 0.5 0.6 0.6 0.5 0.7 6.2
      Transportation 1.4 2.0 3.1 1.3 2.1 -0.5 0.5 11.3
      Medical care 0.1 0.6 0.5 0.4 0.7 0.4 0.8 5.6

 

The BLS releases inflation data around the middle of a month for consumer prices surveyed up to the previous month. The Consumer Price Index (CPI) for September and the latest annual period become public on Oct. 13, 2022.

CPI data is used in calculating inflation rates and in this site’s U.S. Inflation Calculator. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.

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